Petaluma's Cyan falls after $88 million IPO

Optical network equipment supplier Cyan recovered early losses on its heavily traded market debut as investors look to its ability to reduce dependence on a single customer.

Nearly 3.5 million shares had been traded by 11 a.m. Pacific time, making Cyan the fifth most-traded stock on the New York Stock Exchange on Thursday afternoon.

The Petaluma-based company priced 8 million shares in the offering at $11 each, the mid-point of its planned price range, giving it a market valuation of about $490 million.

CEO Mark Floyd said Cyan planned to reduce its dependence on telephone company Windstream, which accounted for about half of Cyan's revenue in 2012.

"Last year, we added 50 new customers and we expect those customers to start turning on this year," he told Reuters.

Windstream, which reported lower-than-expected first-quarter profit on Thursday, has been grappling with slowing sales at its fixed-line business. The company cut up to 400 management jobs in March and warned it may cut its 2013 capital expenditure.